Firm Updates

McCafferty & Company Releases Cable TV and Film Primers

October 2015: McCafferty & Company announces the addition of two new industry primers to its research catalog. The Cable TV Primer provides an in-depth examination of the US cable industry ecosystem and its evolution, including the impact of anytime, anywhere devices and streaming services on viewer consumption habits, the subscriber model and ad-revenues. The Film Primer provides a comprehensive look into the film industry market, profitability, and processes. Key industry themes, distribution channels, and revenue streams are explored.

The reports are now available for public download on the McCafferty & Co. website, through the firm's secure research portal.

Important Industry News

Top Developments Influencing Tech & Media

AOL Expands its Mobile Ad Presence with the Acquisition of Millennial Media

September 2015: Hoping to capitalize on the growth of the mobile ad-market, AOL (now owned by Verizon) finalized the acquisition of the mobile ad-tech company, Millennial Media. Under the terms of the deal, AOL will pay $1.75/share for an estimated total value of $238 million.

The deal is part of a bigger strategy for Verizon to monetize and further grow its vast mobile audience. The addition of Millennial to AOL puts Verizon in competition with Google and Facebook, which currently dominate the mobile ad-market.

September 2015: Heavy M&A activity in digital media continues as companies hedge bets on the future of online content, distribution, and monetization. One such player is publishing giant, News Corp, who announced plans to acquire global ad platform, Unruly for up to $176 million ($90 million upfront and up to an additional $86 million, contingent on performance metrics).

Unruly’s software distributes, publishes, and tracks video advertising across multiple channels, from online news pages to social feeds, and has garnered over 2 trillion views to date.The deal will grant NewsCorp access to Unruly's social video advertising platform, including targeting tools that can reportedly predict the “virality of a video" (how a digital video will perform), based on historical sharing insights (1).

Magna Global estimates that spending on digital video advertising will surge 40% this year to about $15 billion. NewsCorp believes this deal will mean a significant increase in its premium video and mobile inventory and a stronger content marketing offering (2). With its third quarter ad revenues reportedly dropping by more than 5%, NewsCorp is hoping this investment will improve returns for its advertisers and ultimately, for the company itself (1).

August 2015: On August 4th, The Walt Disney Co. reported revenues of $13.1 billion, falling short of the $13.2 billion estimated by analysts. Quickly following the announcement, the company's stock fell 9% (its lowest stock-performance in 4 years) amid deep concerns about the company's most profitable enterprise, ESPN. According to Nielsen, the network has lost 3.2 million television subscribers in a little over the past year. In that same time frame, the network also parted ways with popular sports broadcasters Bill Simmons and Keith Olbermann (1).

Cord-cutting trends and shifts away from the traditional cable and satellite TV business sent an immense ripple throughout the media industry, causing a loss of 7% in a three day period. Figures released by Nielsen also reported that cable TV networks have shed roughly 2 million households in viewership since the first quarter of 2014.

(1) WSJ

Ad Revenue Potential Soars for Instagram After the Launch of its Ad API Partner Program

August 2015: Instagram has finally opened an Advertising API (application programming interface) to partners, automating the ad plan and buy process for marketers on Instagram--for the first time. The new ad revenue platform will help transform the Facebook-owned photo-sharing app into a major mobile advertising business to rival Google and Twitter (1).

In July of this year, analysts at Bank of America Merrill Lynch published a research note that predicted Instagram's ad revenues could reach near $1 billion in 2017, rising to as much as $3.86 billion by 2020 (1).

(1) Business Insider (2) EMarketer

WME-IMG and Turner Sports Partner to Produce First eSports League for Broadcast TV

August 2015: After acquiring the videogame rep firm Global eSports Management earlier this year, WME-IMG has announced it is partnering with Turner Sports to create a new competitive gaming league for broadcast television. The new eSports gaming league will air in 2016 with two 10-week seasons on TBS. The financial details of the deal have not been disclosed but Turner Sports and WME-IMG plan to start selling ads and sponsorship opportunities for the forthcoming eSports programming. Corporate sponsorships for the sport totaled more than $110 million in North America last year, according to research company Superdata (1).

More than 205 million people worldwide are tuning in to watch competitive video gaming, including 32 million people in the US. Up to this point, the majority of eSports content has been viewed online, through platform companies like Twitch (acquired by Amazon last year for $970 million), Major League Gaming, and YouTube (1). According to Newzoo CEO Peter Warman, eSports is a $278 million business today, and the industry is forecast to surpass $765 million by 2018 (2). This growth has companies looking for more ways to monetize the eSports audience, which is largely dominated by young males (a coveted demographic for marketers).